By Melissa Loovi
Driving the extra mile for heroes
Immersing himself in his brand, BMW Malaysia’s Sales and Marketing Director, Michael Lerch tells us what we always wanted to know about the company behind the ultimate driving machine
Coincidentally, he actually got his start in the always-exciting business of advertising, working with Lowe & Partners in Dusseldorf, Germany. Michael cites his experiences in advertising as pivotal for his current endeavours because he had the privilege of dealing with all sorts of brands – luxury as well as FMCG – on a hands-on basis. As this was back in the 80s, there was no such thing as email or digital layout, and he’s grateful because the lack of technological “cheats” helped to force him to learn every last inch of advertising and formed the basis of his love for branding and marketing strategies.
After his stint in the ad world, Michael had worked with two of the biggest premium automobile manufacturers and in the mid 1990s decided to dedicate himself to BMW, the company which was ranked second worldwide at the time. He enjoyed the motivation of working towards becoming number one worldwide in the premium segment, which BMW achieved a couple of years ago, to his utmost satisfaction. Of course, getting to the top spot is only half the challenge for the entire company, as Michael shared with us.
Can you shed some light on the culture at BMW Malaysia? How is it different or similar to the global BMW culture?
Since I joined the company in July 2006, I have observed that BMW Malaysia is pleasantly similar to BMW Worldwide, which is great as it’s something that the entire organisation has worked tremendously hard to achieve. It’s extremely important to us that customers can be assured that regardless of whether they purchase their BMW in Malaysia or China or Germany, the standards are the same, and this goes far beyond the vehicle itself. We stress professionalism and warmth here, as we are aware that our customers are parting with rather large sums of money in order to join the BMW family. We want to be certain that they walk away not just with satisfaction, but also with joy. In fact, that is our core value and while it may sound philosophical, it’s something we convert into reality every day.
As you can see from our core values, joy is at the centre of the BMW experience. But how do we go about achieving something as intangible as joy?
Well, that’s where the sub-values of being challenging, cultured and dynamic come into play. As the industry leader, we know that all eyes are on us for new innovations so we make sure we stay ahead of the game. The BMW brand also promises premium quality, and we never compromise on that. We are recognised for being sporty, powerful and sleek, with smooth handling.
Lastly, we deliver to our customers’ products that are sophisticated and classic, with rich tradition meeting modern chic in an entirely seamless manner. These are the hallmarks of our brand’s identity and we make it our mission to stay on course at all times. Whether a BMW is purchased forty years ago or forty years from now, these core concepts must still be at the forefront of every little bit that goes into the vehicle. In terms of our staff, we strive to help them understand our brand better, and as we recognise that not all of them can necessarily afford to purchase a BMW at this moment in time, we provide numerous opportunities for them to experience our vehicles through product training sessions, some of which are held at the racetrack. It has proven to be a great way to build their understanding of the BMW culture and its core values, and of course, everyone has lots of fun, too.
It’s no secret that the world’s economy is being hit pretty hard. How vulnerable is BMW, especially in this age of globalisation?
Naturally, we are concerned about the current financial situation throughout the world. It would be transparent posturing if I said that BMW will not be affected at all because it’s only logical that people will be less keen on purchasing cars at a time like this. However, we also know that this climate of recession will not last forever, as we have witnessed this kind of cycle first-hand and lived to share what was learned. So, it’s all about staying afloat, upping our efforts in terms of creating customer interest and retaining our loyal customers with good service.
We are also heartened by recent statistics, which show a 32 percent increase in our sales volume for the first three quarters of 2008, compared to the same period in 2007. We sold a total of 2,736 units of BMWs (previous year: 2,095) and 148 units of MINIs (previous year: 95), bringing the total number of vehicles sold by BMW Malaysia up to 2,884 units. Though we recognise that the recent escalation of the global financial crisis is affecting consumer confidence, we remain optimistic about the Malaysian market. Our sales figures point to a better total year performance, and we will work on taking it forward from here onwards. While for the time being we are the second luxury car brand in Malaysia, our efforts in further enhancing the brand by bringing in more high performance and fuel-efficient vehicles coupled with quality service and innovative financing and insurance, will assure our position as the fastest growing brand in the premium vehicle segment in Malaysia.
What about the idea of a perfect car? What is BMW’s vision in this regard?
BMW has a wide range of products – everything from sports sedans to SAVs (sports activity vehicles) and roadsters – that cater for any lifestyle. In this way, we seek to build the perfect car for every customer and their individual lifestyle. The vehicles (let’s not forget we have motorcycles and bicycles, too!) that we make are uniquely designed to appeal to diverse customer profiles, yet they are all based on BMW’s core principles of joy and innovation. ‘Sheer Driving Pleasure’ means just that – the most spectacular experience any driver could ask for.
Of course, in today’s eco-conscious world, a perfect vehicle also needs to take into consideration the growing scarcity of natural resources and copious amounts of pollution that is a growing global problem. For us, it is imperative to build fuel-efficient cars and our growing diesel range is a perfect example, as it is significantly more fuel-efficient. This is part of our Efficient Dynamics program where we launched High Precision Injection a few months ago. This latest innovation makes BMW’s twin turbo, six-cylinder units the benchmark for efficiency and performance, which features direct fuel injection, allowing lean burn operation of the engine throughout a wide range of engine speeds, therefore helping to significantly reduce fuel consumption in everyday traffic despite the further increase in engine power.
We are also ready to launch the new generation of four-cylinder petrol engines here in Malaysia, as soon as better fuel quality is available here (as a pre-condition). As expected, this is increasingly important in times of increasing fuel prices. Accordingly, we are committed to continuously exploring new niches through which we can cater for the modern green consumer. We are venturing into hybrid models now and hydrogen cars will follow soon after. This is the future and the responsible path for all manufacturers, so we have already been dedicating our effort and resources into R&D for the goal of preserving our planet.
Sales growth comes from both new products and boosting volume of existing products. At BMW Malaysia, which plays a bigger role?
Undoubtedly, our 3 Series and 5 Series sell extremely well in Malaysia, to the extent that we are producing these ranges locally, to accommodate the high demand. So these are our best sellers in this market because traditional concepts such as the sedan are popular in Malaysia (compared to Europe where station wagons enjoy a high market share). In the near future, we will be introducing the all-new 7 Series, which will be packed with breakthrough technologies, so we’re very excited and hope that our consumers will be thrilled with the 7 Series, too.
If we were to categorise the market in terms of growth, how would the Malaysian luxury car consumer be segmented?
Actually, Malaysia is the biggest passenger car market in South East Asia, thus making it a very important market for us. At BMW, we are very appreciative of the stable growth that we’ve experienced in this country, which is largely due to the reliability of the Malaysian economy. So it’s a great aspect of the Malaysian economy that we’ve utilised to our advantage. As for the prototypical BMW owner in Malaysia, we generally appeal to the more modern set of successful self-employed entrepreneurs.
Compared to our main competitors, our customers are mostly younger, on average. Naturally, we are very interested in gaining more up-and-coming executives as our customers with our entry models like the 1 Series, but at the moment that layer is still rather thin in Malaysia. In order to encourage the younger generation, we have devised several programs, chief of which is BMW Credit. The instalment program offers attractive financing with interest rates as low as 1.88%. In this manner, one can purchase the 3 Series for less than RM3,000 a month. This means that young professionals who have yet to hit the millionaire mark can now own their first BMW that much earlier. The focus for us is this early market as it is ever increasing and we are very aware that if we can secure them as our customers at a young age, and we keep them happy with great service and excellent automobiles, they will remain as our lifelong loyal customers.
So customer loyalty is a major focus. How do you go about building that intrinsic love for BMW among its owners?
Firstly, BMW ensures that all customers receive excellent after-sales service. This includes three years (or 60,000 km) of free servicing for your BMW vehicle. Yes, this is costly to the company but it provides our customers with well-earned peace of mind. After all, they have just parted with a significant amount of money to own a BMW, so it’s only fair that we should look after them, too. Our staff are also trained to look at every customer as equal, regardless of how many BMW vehicles they own or which model it may be. Everyone deserves the best service we can possibly deliver, and this is our commitment to our customers.
We also have the BMW White Card, which is given to anyone who purchases a BMW. This card provides all sorts of discounts and privileges ranging from dining to shopping and social events. For example, BMW owners may be invited for an exclusive full-day cooking class at a renowned French restaurant, and they would only have to pay a small, highly subsidised fee. We also have the BMW Golf Tournament, a yearly event that began last year, where fantastic prizes are up for grabs. We reach out to and support the film community with the annual BMW Shorties, a competition that has yielded amazing creative works and continues to highlight deserving Malaysian talents. And let’s not forget our yearly BMW Sauber F1 party bash at KLCC!
However, the most important program we have is our driver-training program. The idea was introduced in 1977 as the first of its kind; initiated by an automotive manufacturer, to improve the skills, reactions and awareness of drivers. Today, the BMW Driver Training are extended and tailor-made to each individual’s driving needs. We will show you how to get the best driving experience from your BMW and as Malaysia has the wonderful Sepang F1 circuit, these training sessions really are a thrill ride.
Tell us a little about BMW Malaysia’s marketing communications strategies.
The subsidiarity principle plays an important role in all our marketing campaigns. With this concept, advertising strategies start out as global initiatives before they are adapted to suit local needs and cultures. However, the central focus is always on creating desirability for the sheer pleasure that a BMW vehicle can provide. The copywriting is completely localised and the work is handled by Naga DDB and Rapp Collins.
Where does R&D fit into the picture, in terms of priorities for the company?
Research is right at the top of our list because as the leading luxury car brand, we are expected to constantly be at the cutting edge of innovation and breakthrough technology. Although not every person who wants to buy a car will purchase a BMW or other luxury cars, the fact remains that product innovations, in any field but particularly in automobiles, always come from the premium segment of the market. Because we have larger budgets dedicated to R&D, we make the new discoveries such as lighter frames, and safety features, and more efficient engines, the rest of the market gradually finds ways to adopt our findings into their mass-market models. So I think we play a major role in the chain of new developments for the automobile industry as a whole.
Clearly, BMW Malaysia’s short-term goals are definite and within range. What about the company’s long-term goals?
We are very clear about wanting to replicate in Malaysia the kind of success that the BMW Group has received throughout the world, while always maintaining our superior quality to give customers the best ownership experience. We also want to be the one-stop centre for our customers; you can trade in your existing car, obtain BMW insurance, service your BMW and rest assured that all of this comes with excellent financial plans. captions:
Michael Lerch, Sales and Marketing Director, BMW Malaysia Be prepared to mesmerised at the one of a kind showroom The BMW M6 makes driving better than sex! Wonder what Freaude am Fahren means? It’s Driving Pleasure A night where all hell breaks loose Feel the rush with BMWS1000RR